Some Certainty for Investors in Renewable Electricity

Monday, April 1, 2013

Developers of renewable electricity projects will be able to apply for support to enable them to commission and build projects more quickly.

The Government’s Final Investment Decision Enabling programme is designed to help developers of low carbon electricity projects make final investment decisions ahead of changes to the electricity market in the second half of 2014. Further details of the process for providing support to renewable electricity projects have been published, including information on the form of support available and the qualification criteria.

Investment means early construction

The Government aims to offer investment contracts to successful applicants in the autumn, based on the draft strike prices and contract terms that will be published in the summer. By helping developers make final investment decisions this year, this process should, in theory, allow construction to start on a number of projects sooner than otherwise would have been the case.

Under a Contract for Difference, returns for generators are stabilised at a fixed price level known as the ‘strike price.’ Generators will receive revenue from selling their electricity into the market as usual. However, when the market reference price is below the strike price they will also receive a top-up payment from suppliers for the additional amount. Conversely if the reference price is above the strike price, the generator must pay back the difference.

The Final Investment Decision Enabling document can be downloaded here.

For more information, help or advice please contact our Energy Team on 0191 211 7777 or email [email protected].